Simon Cowell has admitted to some nerves over the $5 million recording contract prize on X Factor USA, but insisted that he is confident it was the right decision.

The British judge was asked on a conference call with reporters today if he was "nervous" about offering the record-breaking prize with Sony.

"I think we should be nervous," he replied. "The reason we decided to do this was to show the people who are auditioning for the show is that sometimes you have to put your money where your mouth is. By putting up that kind of prize money it's a massive, massive risk but it's also an incredible incentive."

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He went on to say that the large prize "puts everybody rightly under an enormous amount of pressure" but maintained that he decided the large sum was appropriate given the circumstances.

"I'm nervous but I'm also confident that it was the right thing to do," he explained. "I think it should be a life-changing prize and just to be clear, this isn't a dressed-up $5 million, this is a guaranteed $5 million payable to the winner. The recording, marketing and video costs are completely separate to that. It will be paid over five years at $1 million a year."

He also revealed that financial support will be offered to the eventual winner to aid them with "investing" and "looking after" the cash.

As for which Sony label the artist will be signed to, he told reporters that the show would likely wait and see which specialist label could offer the best support for the eventual winner based on the type of music they choose to perform.

Cowell was also quizzed about whether the show's winner could expect "Leona Lewis-type automatic success" in the music industry, to which he said: "Obviously I hope so. I think if we can't, with what is on offer, find a global star then I would say we've failed. I can't put it any clearer than that."

"You want the person to succeed in a way you hope you can say, 'I was there at the beginning'," he added. "I think part of the reason we put the prize money up to $5 million was as an incentive and to make the point that we are genuinely serious about this and we believe there is somebody with that star quality out there."

Auditions for X Factor USA will kick off in Los Angeles on March 27, before travelling to Chicago, New York, Dallas, Miami and Seattle. The show will premiere on Fox later this year.